Subject: Re: Our FOFs pro-forma
From: "Eric Schwerin" <[email-masked]>
To: <[email-masked]>
Cc: "Hunter Biden" <[email-masked]>, <[email-masked]>
Date: Tue, 27 Apr 2010 10:47:03 -0500

Not an expert on what the expenses would amount to but if we could say  
there is a cap on expenses at maybe $250k that would be .05% of $50m  
or the 1% of the second $25m Devon is proposing I bet we could make  
that work in the way Hunter is proposing.   If we could get LoPresti  
to do legal work for flat fee what other expenses are there?  
Compliance, does the broker dealer charge a fee?

Eric D. Schwerin
[email-masked]

Sent from my iPhone

On Apr 27, 2010, at 10:30 AM, [email-masked] wrote:

> If we can run reasonable expenses through the vehicle I see it as a  
> further value add. Maybe its the first $25mm non fee'd. I also think  
> it should be strictly hedge fund populated and we're going to need  
> to add another manager or two even at this level.
>
> And especially if Casey can help round up the capital it makes sense.
> Sent via BlackBerry by AT&T
>
> From: [email-masked]
> Date: Tue, 27 Apr 2010 14:34:59 +0000
> To: <[email-masked]>; Eric Schwerin<[email-masked] 
> >
> Cc: Devon Archer<[email-masked]>
> Subject: Re: Our FOFs pro-forma
>
> Only reason to do it is to move our alt inv advisory business into a  
> investment mgmt business- avoid conflict when approaching investors  
> and give Arlene a home she is comfortable and competent running.
>
> As a FoFs we can approach institutional and high net worth on our  
> own terms and not on behalf of a "client." It would simply be  
> another high value arrow in our quiver.
>
> Aside from that it relieves the pressure of me busting my ass for  
> 20K p/m clients with close relationships for no more than what we  
> are getting on a retainer basis.
>
> The way I look at it is this: Arlene runs the FoFs business- she has  
> commitments for first 50M- we develop track record and raise more if  
> we see real potential. The fund charges no I.m. Fee and no incentive  
> fee for first 50M. We DO charge expenses which include Arlene's  
> salary. After first 50 and a few years of real progress we raise  
> more and charge typical 1 and 10.
>
> One of the realities we have come up against is raising from Taft  
> Hartley is more complicated than I thought. If we were raising for  
> co-invest 2 or Matador I'd be able to put it all on the line as my  
> own. Doing it as a pseudo 3rd party is hard to explain.
> Sent on the Sprint® Now Network from my BlackBerry®
>
> From: [email-masked]
> Date: Tue, 27 Apr 2010 03:25:42 +0000
> To: Eric Schwerin<[email-masked]>
> Cc: Hunter Biden<[email-masked]>; Devon Archer<[email-masked] 
> >
> Subject: Re: Our FOFs pro-forma
>
> Agreed. Once I have the concept draft outlining the opportunity  
> (tomorrow AM), I will attach this page of "considerations" for us to  
> discuss. I still don't fully understand why we'd do this, but need  
> to see it fully laid out.
>
> Sent from my Verizon Wireless BlackBerry
>
> From: Eric Schwerin <[email-masked]>
> Date: Mon, 26 Apr 2010 18:32:27 -0400
> To: Neil Callahan<[email-masked]>
> Cc: Hunter Biden<[email-masked]>; Devon Archer<[email-masked] 
> >
> Subject: Re: Our FOFs pro-forma
>
> Neil-
>
> Per our conversation today, it would be helpful to evaluate this  
> FOFs on a variety of levels.
>
> 1) Do we agree that we should take no management fee/performance fee?
> 2) Do we think the money could be raised if we did take either fees?
> 3) If we think the money can be raised, how much time would be  
> required from the principals to do so?  Arlene believes she can  
> raise all of the money if we had no fees.  But is it worth others'  
> time to try and raise money if we were to charge a fee?
> 4) What is the purpose of this if we are getting no income from it?
> 5) Do we develop a model where the first $50m is fee-free, but  
> anything after that involves a fee?  How much would we make from  
> this and at what point would we have the ability to jettison our  
> Fund clients?
> 6) What would having the FOF be "woman-owned" by Arlene mean?
> 7) Would we charge fees for legal and regulatory work at least?  It  
> shouldn't cost us anything, right?
>
> Just some questions how I am framing this.
>
> Eric
>
>
>
>
> Eric D. Schwerin
> Rosemont Seneca Partners, LLC
> 1010 Wisconsin Ave., NW
> Suite 705
> Washington, DC 20007
> (202) 333-1880
> [email-masked]
> P Consider the environment before printing this email.